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Edited version of your written advice
Authorisation Number: 1051445077526
Date of advice: 24 October 2018
Ruling
Subject: GST and supply of skills assessments
Question 1
Will the skills assessment for the X program conducted by Ausco be a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No. The skills assessment for the X program conducted by Ausco will be GST-free under section 38-110 of the GST Act whether they will be provided in Australia or overseas.
Question 2
Will the skills assessment for the Y program conducted by Ausco be a taxable supply under section 9-5 of the GST Act?
Answer
No. The skills assessment for the Y program conducted by Ausco will be GST-free under section 38-110 of the GST Act whether they will be provided in Australia or overseas.
Question 3
Will the skills assessment for the Z program conducted by Ausco be a taxable supply under section 9-5 of the GST Act?
Answer
No. The skills assessment for the Z program conducted by Ausco will be GST-free under section 38-110 of the GST Act.
Relevant facts
Ausco is registered for the goods and services tax (GST).
Ausco is not a Registered Training Organisation (RTO) and is an assessing authority for a government agency for assessments required for the purpose of A.
Ausco offers several different skills assessment programs and will charge and collect fees from the applicants for applications for the skills assessment as a relevant skills assessing authority. A skills assessment outcome is then provided to the applicant. For some applicants, the skills assessment forms part of their visa assessment. Other applicants are seeking recognition of their skills for employment purposes.
Ausco engages approved RTOs to perform aspects of the skills assessments process on its behalf under certain programs. The skills assessment may be conducted ‘in person’, via an online face-to-face platform or overseas by the RTOs.
Ausco’s supplies of skills assessments are for the educational qualifications and work experiences of the individuals and involve the assessment of qualifications for the purposes of the individuals gaining employment in Australia.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5
A New Tax System (Goods and Services Tax) Act 1999 section 38-110
Reasons for decisions
Note: Where the term ‘Australia’ is used in this document, it is referring to the ‘indirect tax zone’ as defined in section 195-1 of the GST Act.
Questions 1, 2 and 3
GST is payable on a taxable supply. A supply is a taxable supply under section 9-5 of the GST Act if:
a. the supplier makes the supply for consideration; and
b. the supply is made in the course or furtherance of an enterprise that the supplier carries on; and
c. the supply is connected with Australia; and
d. the supplier is registered or required to be registered for GST.
However the supply is not a taxable supply to the extent that it is GST-free or input taxed.
All of the above must be satisfied for Ausco’s supplies of skills assessment to be a taxable supply.
From the information given, Ausco’s supplies of skills assessment will satisfy paragraphs (a) to (d) of section 9-5 of the GST Act as:
a) Ausco will make its supplies of skills assessment for consideration; and
b) Ausco will make the supplies in the course of a business that it carries on; and
c) Ausco’s supplies are connected with Australia as the supplies will be made through a business that is carried on in Australia; and
d) Ausco is registered for GST.
However, Ausco’s supplies of skills assessment are not taxable supplies to the extent that they are GST-free or input taxed.
There is no provision under the GST Act that makes Ausco’s supplies of skills assessment input taxed.
GST-free supply
Relevant to Ausco’s supplies of skills assessment is section 38-110 and item 2 in the table in subsection 38-190(1) of GST Act (item 2).
Section 38-110 of the GST Act
Section 38-110 of the GST Act deals with recognition of prior learning, it states:
1) A supply is GST-free if the supply is the assessment or issue of qualifications for the purpose of:
a) access to education; or
b) membership of a professional or trade association; or
c) registration or licensing for a particular occupation; or
d) employment.
2) However, a supply is not GST-free under subsection (1) unless the supply is carried out by:
a) a professional or trade association; or
b) an *education institution; or
c) an entity that is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services; or
d) an authority of the Commonwealth or of a State or Territory; or
e) a local government body.
(*denotes a defined term in section 195-1 of the GST Act).
Ausco’s supplies of skills assessments are for the educational qualifications and work experiences of the individuals and involve the assessment of qualifications for the purposes of the individuals gaining employment in Australia. In this instance subsection 38-110(1) of the GST Act is satisfied.
Ausco is recognised by a government agency as the approved entity to assess the qualifications of individuals in relation to obtaining employment for nominated occupations and it contracts RTOs to carry out the assessments on its behalf.
In this instance the supplies of skills assessments made by Ausco are not excluded from being GST-free under subsection 38-110(2) of the GST Act as the assessments are carried out by RTOs, entities that are registered by a training recognition authority.
Accordingly, Ausco’s supplies of assessment skills under the X, Y and Z programs will be GST-free under section 38-110 whether they will be provided to applicants in Australia or overseas.
As section 38-110 of the GST Act applies to Ausco’s supplies it is not necessary to consider item 2 in the table in subsection 38-190(1) of the GST Act.
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